Incentives & Rewards in the 21st Century
Written by: Jim Finkelstein and Melissa Mead, FutureSense, Inc.
“Real success is finding your lifework in the work that you love”
- David McCullough
There’s no law that says you must actually like your job. But what is it that motivates people to get up every day and go to work? And think about this, if your employee population all won the lottery tomorrow – that is, they were all financially set for life – 95%-98% of them would not show up the next day! Can you really and truly afford to not understand what melts their butter?
Maybe it has something to do with the rewards, recognition and incentives that accompany showing up and staying for years on end. Some will argue that the bona fide way to a committed and loyal employee’s heart is solely through monetary earnings, not to mention the gratification of a steady income. Or maybe, it has to do with working in an inspired environment, where appreciation and respect for fellow co-workers and employer not only exists but is the norm. People want to feel wanted and appreciated. It’s only human nature.
Preventing the Butter from Hardening
Let’s first start with understanding what turnoffs to an employee are. Performance appraisals in the workplace are frequent, and nearly impossible to avoid. They are the quintessential “CYA” activity. But why do people shun the word “appraisal” as if it were the plague?
Performance appraisals shouldn’t be feared. In fact, they should be welcomed with open arms. In an ideal world, employers wouldn’t “manage” people like two-year-olds. Rather, they would encourage skill development and offer training, mentoring and coaching to make that happen. This way, there would be a whole lot more empowerment going on, instead of nitty-gritty micro-management, which everyone just loves.
Rather than scrutinizing every little minute detail or skill involved with an employee’s work style or work ethic, or way of going about daily tasks, it’s certainly more encouraging to ground oneself in a comprehensive knowledge of individual and organizational development and thus learn to recognize and address the achievement of success through valuing, motivating, and rewarding people.
The focus of monitoring and assessing workplace performance should undoubtedly be placed on setting attainable and collaborative goals, making collective decisions, and being able to tackle and solve problems within one’s own relative sphere of responsibility and authority along with one’s colleagues.
Yes, while workplace performance is frequently monitored (as perhaps some believe it should be), there’s no reason why appraisals shouldn’t focus on the positives and be a catalyst to cooperation and communications. The butter will start to soften up a bit.
Increasing the value of people, and truly understanding why people show up to work, and why they stay, is just as important as why they leave.
The tricky part, however, is that not everyone is motivated by the same things. One very important item to realize about motivation itself is that it is an incredibly individual expression. Figuring it out might prove to be quite the challenge in larger organizations, but probing and prodding for what melts your employee’s butter—their unique motivational profile (“UMP”)—is just an expense that is certainly worth spending.
It goes hand in hand... both employers and co-workers need to be willing to understand and pay attention to the profile of the individual, which is why listening is a vital component of maintaining goal and action-orientated motivation. Communication itself is crucial and practically nonexistent without listening. Along with the ability of employers and employees to actually listen and comprehend what the other has to say, comes the increasing potential to recognize, encourage, and motivate.
That being said, do you really understand your own employees?
Melting the Butter
People are inclined to leave their job because they: don’t like their boss or co-workers, they don’t have the tools to be productive and move forward, and/or they’re working in a toxic environment.
People in the workplace can be motivated by a myriad of things. Yes, some of these things might be ‘extrinsic’ motivators. In fact, to this day, some of them are very basic even in late 2012. Having (and keeping) a job that can pay the bills ranks noticeably high in everyone’s profile.
Money is notoriously viewed as a motivator. But it’s surely not the only thing that gets you out of your flannel PJs, into your car, and onto your rollie-chair inside your cubicle. Compensation is an extrinsic motivator, and one of the best at that. The anticipation that rests in such satisfaction through rewards processes (i.e. paychecks and raises and the occasional bonus) is enough to coax employees to tackle mundane tasks and things they really could care less about.
But obviously, if money were the only motivating factor in existence, it wouldn’t take very long for people to become exhausted with those tedious tasks, and risk leaving their secure occupation for something better, or for potentially more money.
A large portion of motivators in the 21st century just so happen to be ‘intrinsic’ motivators, which most certainly include: the excitement that one’s work brings them, engaging projects, the interesting environments in which people work, the captivating people whom which they work with, the work-life balance that one’s job allows them to have, not to mention the ongoing search for meaning and purpose within their life and passion for their work.
This is due, in large part, to both the newness to the workforce of the Millennials – the youngsters with high ideals – as well as the fatigued experience of the Boomers – the older folks that were supposed to be gone by now who now feel stuck in their jobs. Money, while important, is just not what it used to be.
What’s In It For Me
For every ten articles you read on compensation five will say money is key and five will say lifestyle, workplace accommodations, etc. are key. Here is the scoop—the one with the cherry on top. In a workplace populated today with 18-80 year olds, they all expect both.
Above all, there are no “best” practices that can apply across the board to all organizations and all people in a highly diverse and divergent world of cultures, values and opinions. There are a plethora of tools to use; your job is to find the right mix for your people.
People want it all, and in the 21st century they are tuned into WII-FM (What’s In it For Me). Thus, if you can tap into and listen to the music they enjoy, determine their UMP, then you can put together the right mix of incentives, rewards and motivation to melt their butter.
Jim Finkelstein is the President and CEO of FutureSense, Inc.., a management consulting firm specializing in people and organizations ( HYPERLINK "http://www.futuresense.com" www.futuresense.com). He is the author of Fuse: Making Sense of the New Cogenerational Workplace® (Greenleaf Book Group, October 2011) ( HYPERLINK "http://www.fusethebook.com" www.fusethebook.com). Melissa Mead is the Social Media Coordinator for FutureSense.
Six issues at the top of tax and finance leaders’ agenda
New Deloitte research reveals that tax leaders are under increasing pressure to add strategic value as companies accelerate business model transformation, from undergoing digital transformations to rethinking their supply chains or investing in green initiatives.
According to Phil Mills, Deloitte Global Tax & Legal Leader, to “truly deliver value to the business, the tax function needs to rethink its resourcing model and transform its technology infrastructure to create capacity and control costs”.
And the good news, according to Mills, is that tax and business leaders have more options at their disposal to achieve this.
Reflecting the insights of global tax and finance executives at global companies, Deloitte’s Tax Operations in Focus study reveals the six issues at the top of tax and finance leaders’ agenda.
Trend 1: Businesses seek more strategic counsel from tax
Companies are being pushed to develop new digital products and distribution channels and accelerate sustainable transformation and this is taking them into uncharted tax territory. Tax leaders say their teams must have the resources and skills to give deeper advisory support on digital business models (65%), supply chain restructuring (49%) and sustainability (48%) over the next two years. This means redrawing the boundaries of what tax professionals focus on, and accelerating adoption of advanced technologies and lower-cost resourcing models to meet compliance requirements and free up time.
According to Joanne Walker, Group Tax Director, BT Group PLC, "There’s still a heavy compliance load today, but the vision for the future would be that much of that falls away, and tax people become subject matter experts who help program the machine, ensure quality control, and redirect their time to advisory activity.”
Trend 2: Tipping point for resourcing models
Business partnering demands in the tax department are on the rise, but 93% of tax leaders say their department’s budget is remaining flat or falling. To ensure that the tax function can redefine itself as a strategic function at the pace that is required, leaders are choosing to move increasing amounts of compliance and reporting to a combination of shared service centers, finance departments, and outsourcing providers that have invested in best-in-class technology.
Trend 3: Digital tax administration is moving faster than expected
in addition to the rising focus of the corporate tax department partnering with their business counterparts, transformative changes to the way companies share tax information with revenue authorities is also creating an imperative to modernize operations at a faster pace. Nine in 10 (92%) respondents say that shifting revenue authority demands on digital tax administration will have a moderate or high impact on tax operations and resources over the next five years—and several heads of tax said the trend is moving faster than expected.
"It’s really stepped up in the last couple of years," says Anna Elphick, VP Tax, Unilever. "Tax authorities don't just want a faster turnaround for compliance but access into a company’s systems. It's not unreasonable to think that in a much shorter time than we expect, compliance will be about companies reviewing a return that's been drafted by the tax authorities."
Trend 4: Data simplification and lower-cost resourcing are top priorities
Tax leaders said that simplifying data management (53%) and moving to lower-cost resourcing models (51%) must be prioritized if tax is to become more proactive at delivering strategic insights to the business. Many tax teams are ensuring that they have a seat at the table as ERP systems are overhauled, which is paying dividends: 56% of those that have introduced NextGen ERP systems are now highly effective at supporting the business with scenario-modeling insights. Only 35% of those with moderate to low use of NextGen ERP systems said the same.
At Stryker, “we automated the source P&L process for transfer pricing which took a huge burden off of the divisions," says David Furgason, Vice President Tax. "Then we created a transfer price database to deposit and retrieve data so we have limited impact on the divisions. We are moving to a single ERP platform which will help us make take the next step with robotics.”
Trend 5: Skillsets are shifting
Embedding a new data infrastructure and redesigning processes are critical for the future tax vision. Tax leaders are aligned — data skills (45%) and technology process experience (43%) are ‘must have’ skills in a tax department of the future, but more traditional tax specialist knowledge also remains key (40%). The trick to success will be in tax leaders facilitating the way these professionals, with their different backgrounds, can work together collectively to unlock lasting value.
Take Infineon Technologies, which formed a VAT technology and governance group "that has the right knowledge about how to change the system to ensure it generates the right reports", according to Matthias Schubert, Global Head of Tax. "Involving them early was key as we took a greenfield approach, so we could think about what the optimal processes would look like and how more intelligent systems could make an impact
Trend 6: 2020 brought productivity improvements
Improved productivity (50%) and accelerating shifts to remote working (48%) were cited as the biggest operational benefits to emerge from COVID-19-driven disruption. But, as 78% of leaders now plan to embed either hybrid or fully remote models in the tax function long term, 34% say maintaining productivity benefits is a top concern. And, as leaders think about building their talent pipeline and strengthening advisory skill sets, 47% say they must prioritize new approaches to talent recognition and career development over the next two years, while 36% say new processes for involving tax in business strategy decisions must be established.